Trützschler inks JDH deal

September 29, 2003

GREENVILLE, SC - The business entities of John D. Hollingsworth on Wheels,
Inc., which had been transferred to a charitable foundation after the death
of John D. Hollingsworth in 2001, will be restructured and certain of them
have been acquired by the Trützschler Group of Monchengladbach, Germany.

Both companies - Trützschler and Hollingsworth - mutually announced
that all operative units of Hollingsworth outside the United States and Canada
have been acquired by the Trützschler Group as of Sept. 18. Hollingsworth's
operations in the U.S. and Canada will remain the property of the Hollingsworth
Foundation.

John D. Hollingsworth is one of the leading manufacturers of steel and flexible
wire clothings for cards and other machines for spinning preparation, long
staple cards and machines for the nonwovens industry. The Hollingsworth Company
here, which has been the main facility, supplies the U.S. market.

The shrinking of the U.S. textile industry and the worldwide move of the
textile industries to Asia have led to less favorable prospects for growth
in the U.S., the companies said. These circumstances have been the reason
for the Hollingsworth Foundation to restructure.

By selling the manufacturing units in Brazil, Mexico and Germany and the
European Service Stations, all activities outside the U.S. and Canada have
been transferred to Trützschler.

The unit headquartered here still will be owned by the Hollingsworth Foundation
and will be directed by existing management. This assures preservation of
the main unit here and ensures that long-term clients in the spinning and
nonwovens industries still can be supplied by Hollingsworth Greenville in
the future.

The Trützschler Group is a worldwide leading manufacturer of cards
for the spinning industry. With the acquisition of wire clothing manufacturing
capabilities, Trützschler is enlarging its product line with steel and
flexible wire clothings for short and long staple cards.

Having enjoyed close cooperation with wire clothing manufacturers in the
past, Trützschler's development and production of its own wire clothing
is a natural step for it to benefit from further cooperative effects, Trützschler
said.

With this acquisition, Trützschler, under the new moniker "Trützschler-Hollingsworth
Card Clothing and Service," said it is planning to achieve a higher presence
in the spinning and nonwovens sectors so that increased service can be offered
to all its clients.

Cone files Ch. 11; accepts Ross offer

September 29, 2003

Shareholders group rejects buyout bid

GREENSBORO, NC - Denim producer Cone Mills Corp. filed for Chapter 11 bankruptcy
protection Wednesday and announced that it has accepted a buyout offer from
Wilbur Ross - a proposal rejected by a shareholders group.

The Cone Mills Shareholders' Committee said Thursday that it won an "overwhelming
victory" for its slate of board nominees in the company during Cone's
annual meeting, which could pressure Cone to abandon the deal to be sold.

Founded in 1891, the company, said Wednesday that it has accepted a letter
of intent from Ross's company, WL Ross & Co. LLC, to buy substantially
all of its assets. The $90 million transaction, including cash and assumed
loans and liabilities, has been approved by the company's board, Cone announced
at the time.

On Thursday, however, the shareholder committee issued a release indicating
that it had received votes for its nominees representing more than 50 percent
of Cone's outstanding shares.

"This is a clear message to the Cone board: Cone shareholders want
to see the company reorganized, not sold to WL Ross," said Marc Kozberg,
committee member and Cone director. "We are confident that superior alternatives
are available and intend to explore them fully."

Cone Mills' new directors are Charles Barry, a Minneapolis businessman;
Randall Kominsky, president of Alliance for Financial Growth Inc.; and Jess
Ravich, president and chief executive of Libra Securities LLC.

In announcing its bankruptcy filing, Cone said it expects to maintain a
significant U.S. employee base, including a substantial number of manufacturing
jobs if a buyout by Ross is completed. The company added that its headquarters
will remain here.

Cone Mills has arranged for $35 million in post-petition financing from
GE Capital, which will be used to fund operations prior to the completion
of the transaction, the company said. Throughout this period, Cone said it
will conduct business as usual, with no interruptions in its operations or
delays in meeting commitments to its customers.

Cone also intends to meet its post-petition obligations to vendors, employees
and others in the normal course of business, it added.

"This transaction is the best available option for the company's customers,
employees and communities," John L. Bakane, Cone CEO, said in the release.
"WL Ross is a well-financed strategic buyer with the means and incentive
to strengthen our business. By joining forces with WL Ross & Co., we will
be much better positioned to meet the enormous challenge of low-cost imports
while remaining an important employer in the textile industry."

Bakane added that the U.S. textile industry remains under intense pressure
from a flood of Asian imports.

"Unfortunately, the size and scope of this challenge shows no sign
of diminishing, since appeals to Washington from textile industry leaders
seem to have fallen on deaf ears, with U.S. trade policies continuing to unfairly
favor these overseas competitors."

Ross, who also has agreed to buy bankrupt Greensboro-based Burlington Industries,
bought large stakes in both Burlington and Cone last year in efforts to gain
control of the companies through the bankruptcy courts. Ross told Reuters
that he now holds 9 percent, or some $85 million in Cone bonds at face value.

Levi Strauss & Co., which has been Cone's largest customer for nearly
90 years, Thursday announced the closing of its four remaining manufacturing
and finishing plants in North America as part of its shift away from owned-and-operated
manufacturing.

McMichael, Draper inducted into Hall

September 29, 2003

LOWELL, MA - Industry leaders, friends and families attended a luncheon on
September 8 at the American Textile History Museum here to celebrate the induction
of the Class of 2003 to the American Textile Hall of Fame (ATHF).

The program, now in its third year, honors dedication and commitment to
the nation's textile industry. The ATHF is permanently housed at the American
Textile History Museum here.

Honorees were: Dalton McMichael Sr. (1914 - 2001) of Madison, NC, the visionary
who transformed the manmade yarn preparation industry to become its worldwide
leader during his 60-year career; and The Draper Corporation of Hopedale,
MA, a family-owned manufacturer of innovative textile machinery components
for more than 150 years.

The ceremony included remarks by Arthur M. Spiro, a member of the ATFH board
of governors who presented an award plaque to McMichael's son, Dalton McMichael
Jr., members of his family and business associate William J. Armfield IV.

Accepting the award for the Draper Corporation were J. Craig Huff Jr., ATHM
board member and former Draper officer; and William B. Gannett of the Hopedale
Foundation and a former Draper executive.

The luncheon, hosted by the ATHF board of governors and museum board of
trustees, also included an official dedication of the American Textile Hall
of Fame on the program. A dedicatory plaque was unveiled with special remarks
by Michael J. Smith, president and CEO of the ATHM.

"As Americans, we are a people who revel in the use of our minds and
our hands," Smith said. "We need look no further than the people
and companies inducted into the American Textile Hall of Fame in its first
three years to prove the truth of that statement.

"As we stand here today to offer this dedication, let us pause to remember
but let us also pause to commit ourselves to continuing the gifts that come
to us via the field of American textiles," he added. "Those include
creativity, problem solving, the learned skill of one's hands, the quickness
of the inventive mind, the joy of true teamwork and the pleasure of love and
friendship."

ATHF chairman James M. Fitzgibbons of Chestnut Hill, MA, and retired

chairman of Fieldcrest Cannon, said, "We are pleased to welcome these
two distinguished leaders who embody the American Textile Hall of fame's theme
of 'Enterprise and the American Spirit.' They have made an important difference
in the textile industry, and now have a place in the American Textile Hall
of Fame to tell their story to future generations."

The American Textile Hall of Fame, established in 2001 with a board of governors
appointed by the museum's board of trustees, honors past and present individuals,
corporations and institutions that have made significant contributions to
the textile industry in America as well as those who have advanced the role
and appreciation of textiles in American life.

Members of the inaugural class were industry leader Roger Milliken, chairman
and CEO of Milliken & Co.; textile pioneer Samuel Slater (1768-1835);
and Duke Power, energy supplier to the Carolinas.

The Class of 2002 included E. I. Du Pont de Nemours and Company, Frederick
B. Dent, James Spencer Love and Whitin Machine Works.

The American Textile History Museum focuses on the art, science and history
of U.S. textiles, and is the nation's largest and most comprehensive textile
museum.

Milliken's Nash covers
trade matters from all angles

September 29, 2003

Jock Nash

Editor's note: Following is a "Trade 101" keynote
speech (with some omissions) by Jock Nash, Washington counsel for textile
producer Milliken & Co., delivered extemporaneously to members of the
Textured Yarn Association of America (TYAA) during their Summer Conference
at Myrtle Beach on July 25.

We talk about globalization ... and globalization is a phenomenon that we've
all been experiencing in one form or another for the last 10, 15, 20 years.
And the notion of this globalization is that it's some inexorable force, some
immutable law of nature that's just happening. And what it's up for us to
do is to try to see where this globalization is going and position ourselves
in a way that would result in the success of your business or your family
or whatever.

But that's not really how it's happening. It's not happening like the tide
rolls in or the sun comes up. Globalization is kind of being done to us. Globalization
is occurring because, shortly after the Arab oil embargo and we started doing
these GATT rounds and lowering our tariffs unilaterally compared to the rest
of the world, we started this .... we were the engine of the world. We were
the market of choice. ....

... Some of the things that you learn about trade issues is that our Founding
Fathers had a scheme that was different than all other countries. And their
scheme under our Constitution is that we have an executive branch, a legislative
branch and a judicial branch, all co-equal branches of government.

But for the first time in history, the Founding Fathers left the regulation
of international commerce to that branch of government closest to the people,
the legislative branch, because the Founding Fathers said, "you know,
the effects of international trade weigh most heavily on the people. So we
have to have the representatives of the people be the ones who decide whether
we do that or not" ... because the Founding Fathers in the mid-1700s,
when they were looking at how they were going to lead this great country,
they decided that their recent experience, of course it was with kings, who
would trade away the riches of the realm for any number of reasons.

So the Founding Fathers took that regulation of international commerce away
from the king, the executive branch, and gave it to the legislative branch.

Some of you have heard about trade promotion authority, fast track, and
all fast track is is the legislative branch gives to the executive branch
permission to go out and negotiation international trade agreements. The unfortunate
part is that when those international trade agreements come back to the Congress,
they could only have two choices  vote it up or vote it down. They can't
change a word.

Effectively, what the Congress has done under our scheme, envisioned by
our Founding Fathers, is it's given back the regulation of international commerce
back the king. And you can see what the king does with it. The king, President
Bush, will say, "Pakistan is our loyal ally in the war against terrorism
and their largest industry is the textile industry. They want more access
for our market." And they ask for more access. But at that point, at
the time of the Afghan war, our textile industry was right up to here with
trading us away. And so the industry was able to put sufficient pressure,
so the only thing they gave the Pakistanis was about $100 million of new concessions.

But you can see the trend, you can see what they're doing. You can see in
the comments of our Secretary of Commerce, our Secretary of Treasury, our
U.S. Trade Representative. They're always talking about how we've got to raise
up the Third World, how important it is that the rest of the world benefit
from opening free trade. I love the fact that they care. The problem is, are
they paying attention to what's happening at home? Because a direct result
of their actions is that we are hurting.

We've lost three-quarters of a million jobs ( a job loss of biblical proportions
) since 1994. Now if you take an $8-1/2 dollar an hour job in the United States
and that job goes to Cambodia, depending on whether it's a Cambodian-owned
apparel company or whether it's a private sector apparel company where the
wages for that woman or man making that apparel is $40 a month or $30 a month
... so that $8-1/2 dollar job an hour in American all of a sudden becomes
a $40 or $30 a month job in Cambodia.

Same with the higher-paid textile jobs. When they go, they don't stay $10-1/2
dollar an hour job when they leave here. The race is to the bottom.

At the same time, our government, is saying, "my god, we don't need
this industry. We should give it to Mexico, the Central American countries,
to Africa." And what we're finding out is that after having given away
these jobs ( and they have in fact been given away, they're not taken ) the
question is whether we markedly improve the lives of the other 6 million people
in the world as a consequence of our losing 3/4 of a million jobs, just in
textiles and apparel. My view is that no, we have not.

A lot of the jobs, for instance, have gone to the Dominican Republic, a
powerhouse in the Caribbean as far as making apparel and textiles and sending
them to the United States. But a year ago, in order to stay competitive, the
Dominican Republic lowered its wage of $150 a month to $100 a month. So what
you see is that these people who our policy people in Washington are trying
to help, it's not really giving them the so-called industrial take-off that
the economists say is going to happen.

We have a free trade agreement with Mexico, we move a certain amount of
manufacturing down there, they start earning more money, they have money to
buy our stuff. Well, that's not exactly how our free trade agreements are
working, because our free trade agreements are not really trade agreements
but in fact are investment agreements.

If we take all goods and services ( manufactured goods and licensing agreements
and patents and copyrights ) our overall imbalance of trade is now $500-odd
billion a year. Do the math: $1 million a minute that we are under-producing.
It's better to say under-producing rather than over-consuming. And I have
no problem with consumption, but the problem is we're not consuming what we
make. In fact, we don't make enough for us to consume today  just to
take care of the demands in our market, which is the greatest economic asset
that we have. It worked for us to have cars that we demand and we need. We
have to import $120 billion worth of cars to meet our demands. Our domestic
people couldn't do it. So we have to bring in $120 billion worth of cars in.

The same kind of numbers occur in computers and in every area. So it used
to be that while we import a lot of oil and apparel and toys ( who cares about
those things, right? ) and then we found out that countries elsewhere could
make things, if they could be more sophisticated ( and they do ) the same
way we all experienced, those of us who are middle age ... if I'm middle aged,
I'll live to be 112 ... anyway, remember the cheap Japanese things that came
in and now they probably lead the world in some of these advanced technologies?

I remember a time I talking with a Congressman about a trade deal. And he
said, "you know your problem, Jock, is you don't have faith in America.
Let me tell you something, son. Americans can outproduce anybody in the world.
All we have to do is unleash the entrepreneurial spirit of the American entrepreneur
and their workers and relieve them of the burden of regulations and burdensome
taxes and we can outproduce anybody in the world."

And it's a trend of hubris, a kind of American triumphilism that's all over
the country today: "We're No. 1! The soul remaining super power. We are
the best." And it's that notion that the American working men and women
can outproduce anybody in the world.

And I said, "you know, that's kind of a master race notion ... that
somehow we're genetically predisposed to being the best. That's kind of a
master-race notion that died with the German Nazi Party."

But at Milliken, we know that if you take another human being and you give
him the proper education and training ( whether he be a Mexican or a Chinese
or and American ) they can produce up to your levels of your leadership. There's
nothing unique about us. But this notion that we're the best and, but for
this, that and the other thing, we can be the best in the world and will continue
to be forever is a false notion. We're where we are because we as a nation
and as a people made sacrifices. Today is seems like some of us don't want
to make those sacrifices.

They talk about today, the consumer would love to buy American but they
just can't. But it's the whole notion of the consumer. That's the one who
benefits from free trade. If they're completely honest with you, the people
who are pushing it, free trade does not create jobs. They've been saying that.
It was a horrible mistake and we've been dinging them with it every day. We
know free trade doesn't create jobs. It creates efficiencies. Efficiencies.

(A Japanese leader) and Roger Milliken had a discussion when I first went
to work for Roger Milliken back in the '80s. And (the Japanese man) said,
"you know, you Americans are too obsessed with efficiencies and you're
not obsessed enough with quality of life. We have a distribution system in
Japan that has 12 different people from the producer to the consumer. But
there's a lot of mom and pop stores and there's a lot of jobs in between there."
And they were saying that was sufficient for them. Now everybody is seeing
that Japan's economy is collapsed and everybody's saying that Japan's bad,
yet it's larger than the entire economy in China. All of those things are
true.

But to think that somehow Japan is down and out, forget it ... because those
of you who know, Japan leads the world in almost every major technology. I
can't imagine what would happen to our economy if our Dow were 16 percent
of where it was, which is where the Nikkei is. But Japan is still doing well,
still running trade surpluses and they'll ultimately work their way out of
their bad debt problem. And it's OK to be in debt if you're rich. And Japan
has a wonderful thing about saving. They save their money. Japan is still
the leader of the world and a major, major threat to the United States. They
still run massive surpluses with us in cars and auto parts, electronics. They
completely destroyed our consumer electronics industry. We used to be the
leaders. We invented the TV, the VCR, etc. We don't make these things anymore.
So the last remaining superpower is out of the third largest internationally
traded industrial sector in the world.

And that can happen to others. It's happening to textiles, to electronics
and components. We talk about the textile industry losing jobs, but if you
look over the last year, the people who lost the most jobs was the electronics
industry  a quarter of a million jobs. Last year, we lost 7 percent
of the architects jobs. Now they can outsource all of the drafting and everything.
We're losing engineering jobs. We're losing all kinds of jobs. And why?

It was explained to me by a professor at Cornell University one time. He
said, "you know I'm re-reading Das Kapital by Karl Marx. Karl Marx talked
about the revolution of the proletarian, that ultimately, the workers of the
world ( because of the exploitive nature of capitalism ) rise up and dance
on their grave ... because of the way the corporate capitalists were treating
them. And we saw that as inevitable."

But it didn't happen. It didn't happen. What happened was Karl Marx was
unable to project the moderating influence of Western Democratic political
institutions on the exploitive nature of capitalism. In other words, in Europe
and in the United States, we look at capitalism and created our own hybrid.
We said, "OK, no more child labor laws. Give them workman's comp. We're
going to have a social welfare state for people who are thrown out of work.
We're going to have a safe workplace, we're going to create OSHA. We're going
to have an EPA, because we want to breathe the air. We're going to have a
Clean Water Act because we want to drink the water.

So we created an entire network of things, all of which have the effect
of moderating the exploitive nature of capitalism and we created our own form
of capitalism. It's not a totally free market, not a totally free capitalism.
It is our version. And this made this nation a great place to work, to breathe
the air, drink the water, raise our families. Those same things that made
this a great country and a great place to work now make us uncompetitive with
our new competitors because what happened in the '80s and the '90s is the
global labor force expanded and it expanded by a huge amount.

Now, a billion people ( 1.3 billion people ) in China who had not been competitors
of ours are now competitors of ours. The former Soviet Union, with all of
their people who had not been competitors of ours are now competitors of ours.
So we've got over 6 billion people in the world that we now have to compete
with. But it's not all of us who have to compete with them. It's just our
skilled and unskilled labor that has to compete with them.

Our unskilled labor is about two-thirds of our work force. That means that
if you have a high school education and below, you are a unskilled worker
by definition. Another way of looking at it: If you're non-technical, non-professional
or non-supervisory, you're also an unskilled worker. It's not just the guy
digging a ditch. But it's also the apparel worker who puts this sleeve on
this neck. The most sophisticated person you have in your textile company
is running your sophisticated machinery. But still, unskilled labor.

So what a free trade agreement effectively does is it puts our unskilled
labor in direct competition with unskilled labor elsewhere. And our people
can't compete. They can't compete and still have a mortgage. They can't compete
and still have a car. They can't compete and still own a home and send their
kids to college, because they need a certain standard of living to have that.
But if the average manufacturing worker in the U.S. gets $26 an hour and the
average one in China gets $1, who's going to win that?

And the only way we can protect that is that if you want to come into our
market, then you need to pay a price of admission. That price of admission
pass has always been a tariff. But as you all probably know, our average trade
tariff now in the U.S. is 3 percent or less, while the tariffs in India are
30, 40, 50 percent. We have a billion people in India, but a quarter of a
million of them are middle class. But I double-dog dare any one of you to
try to compete in that market, because you have to manufacture it here, package
it, insure it, ship it, pay their tariff and then get into their market and
you have access to 200 million so-called middle class people in India.

We're now in the midst of another trade negotiating round, where they hope
to make India bring down its tariffs. But why should they? What do they get
in return? We've already given ours away. So we're coming to the negotiating
table with a 3 percent tariff and they're coming at it with a 45 to 50 percent
tariff and it's not going to work. Our government has come up with a proposal
to have zero tariffs globally. Of course, it was dead on arrival in Geneva,
but they're still going to work on that.

But you know, tariffs are kind of funny. For most people, they're not even
a speed bump. Ours are so low, they're not bothersome to anybody really. But
it's non-tariff barriers that really kind of run the show in international
trade debate.

In 1999, when I was in Switzerland at the World Economic Forum meeting ...
someone told me that Europe has quotas on Chinese shoes. The Europeans have
quotas on virtually everything China makes. As a consequence, you go back
and look at the trade relationship between the EU and China over the last
10 years, you'll find out there's relatively balanced trade. Recently they
ran a $50 billion deficit with China, the EU 15, which I think is almost 400
million people, just like us. Big market. But they only have a $50 billion
deficit with China. ...

Well, there's no economic theory in the world that would allow that to happen
unless something is in play. And that is the so-called NTB ( non-tariff barriers
). All of you who ship to Europe are familiar with ISO-2000, ISO-9000. That
if you want to get into the European market, you have to be certified and
so on. That's a trade barrier of a sort. And they use these non-tariff barriers.
They've elevated it to an art form. And they do it all the time. In fact,
their quotas on China aren't even going to expire for a number of years. We're
about the same size market as all of Europe, but Europe has been sheltered
from Chinese competition over the last 10 or 15 years. And we have not been.
And we've been devastated as a consequence.

That's called trade diversion. If a market over there closes their market
to Chinese goods, Chinese goods will come here as market of last resort or
first resort. And we've allowed that to happen because we honestly, truly
believe in free trade.

It's become a secular religion for our policymakers. Notwithstanding all
the evidence, they believe in free trade. And then they see the other side
of this equation, people like me, as protectionists. Free trade: good. Protectionism:
bad. Everything is in the binary. Something's black, something's white. The
free traders are seen as Renaissance men and women  afraid of nothing,
going courageously into the future knowing that their will to compete will,
at the end of the day, make them winners. And then protectionists are seen
as unable to compete, afraid of competition, driving into the future looking
into the rear-view mirror, wanting to build walls around this country, hurting
the consumer and taxing the consumer.

And so, the whole debate has been on this binary thing. Not Roger Milliken,
surely not me, has ever said that we should stop trade. No one has ever said
that we should build barriers to stop anything from coming into this market.
What we have said is that we should trade to the extent that it benefits us.
And to the extent that it doesn't benefit us, we should not.

Clearly we have an end game, because it's the only solution for our great
nation. And that is, if you want to sell it here, make it here. If you're
a foreign corporation and you want into this market, then we urge you to become
a corporate citizen of the United States. Bring your technology, bring your
capital, come to America, invest in greenfields, build your plant, hire Americans
at American wages and compete on the only level playing field that exists
( the same environmental laws, the same OSHA, the same income tax, the same
exchange rate ) all of those things, they're all even. So come here and compete.

Some people say, "well, that violates free trade." Well, yes it
does. But that's exactly what China's doing. If you want to sell into China,
you're going to have to make it there sooner or later  sooner rather
than later. And that's the reality.

It's an absolute economic and political imperative for China to create at
least 10 million new jobs a year. With their 1.3 billion people, they have
to create 10 million new jobs a year to stay even. Now, we have 14.7 manufacturing
jobs in America. Were we to sacrifice every one of those jobs just to China
( nobody else ) well, you can do the math. It's not going to take very long
for them to take virtually all of our manufacturing jobs. And, at the end
of 14 or 15 months, still in the next 12-month cycle, they have to create
10 million new jobs. And we would be without anything. They would have our
jobs. And they still have this imperative of creating more.

It's kind of like the old J.D. Rockerfeller walking along the street during
the Depression. And this street urchin comes up to him and says, "you've
got more than your share of wealth. I think you should spread it around."
And J.D. Rockerfeller reached in his pocket and gave him a dime and said,
"here's your share."

We have in this nation the richest nation in the world, created by at the
end result, 280 million Americans over time. And we can give it all away,
all of the wealth that we have, every job that we have and if you spread it
around 6 billion people, you're not going to markedly change anything. We
must do what's in our national self interest. We must not, absolutely must
not, get in the situation where we're driven by secular theology in a way,
a secular religion.

The purpose, what we're all here for, at least in my opinion, is that our
economy serves us. We don't serve the economy. The purpose of the economy
is to enrich us and our people and to give stability to our society. I mean,
a town doesn't have to shut down and it's hospital doesn't have to shut down
because the only manufacturing facilities have gone and now there are no people
with medical insurance who can afford to support the hospital. Part of what's
happening all over the Carolinas is that a lot of people in our dyeing, printing
and finishing and textile operations ... when they close, all of a sudden
the sewer system or the water system doesn't have any money. They passed big
bond measures so that Textile Company X or Y can get their million gallons
a day or whatever they needed. And they depended on that. And now, of course,
that plant has shut down. They don't need those millions of gallons. Now the
residential users have to pay for it if they can.

So the only way we ever can become competitive with a country like China
is if our wages go down to theirs and theirs come up. And we need some sort
of balance in there. ...

But in fact we're not going to be able to ( not without a revolution ) keep
lowering our wages. And the wages are stagnating and they have been stagnating
for a long time, especially for the unskilled labor.

It's kind of common sense. For example, take NAFTA. Mexico has 100 million
people. We have 280 million. As a result of NAFTA, their labor force is basically
our labor force, as well. They have the need to create 1 million jobs a year
in Mexico. Now, they haven't been under Vincente Fox, unfortunately. They've
lost jobs since he took office because now China is taking their jobs, as
well.

But as long as there's an infinite supply of labor, the price of that labor
can't go up, just by the operation of basic economic theory. And that's kind
of what happens when you have 6 billion people in the world. 2-1/2 billion
of them live on less than $2 a day. So there's plenty of people out there
to work for us. The problem is, we need those jobs here. We need more $65,000-a-year
auto workers in this country, auto workers who can afford to buy a house or
cars or send their kids to college and pay for it.

And we've got to worry about that, because obviously we have to educate
our people. But that's not the answer to our problem. Our government is telling
us that we have to have a more educated work force. And the other thing they
say we have to do is increase our exports.

Now, at Milliken, we look at things and try to analyze them in a way that
takes into account that there's something that's been happening like this
for 10, 20 or 30 years. That's a clue that it's probably not going to change
tomorrow. After WWII and the creation of the GI Bill, there was a blip of
people, men, who all of a sudden took advantage of the GI Bill and went to
college. But except for that blip, the number of our fellow Americans who
have gone on to advanced degrees has stayed the same. So it's the same in
2003 as it was in 2000, the same it was in 1970. That leads me to believe
that it's not going to change tomorrow ... where instead of one-third of our
people getting an education, two-thirds would get a higher education. But
that's probably not in the cards because we're all different kinds of people.
You folks know that some people who work in a lot of your plants are non-verbal.
They're different than you and me in some respects. They may be different,
but they're not less intelligent. ...

They're our middle class. The middle class is important because they're
a buffer between the poor and the rich. And we're so fortunate in America
to have that middle class, so we don't, until recently, have bars on our windows.
We don't live in gated communities. The fastest-growing employment sector
is not security guards. And that's what you do when you start getting rid
of the middle class is you have to find ways to protect yourselves. Third
World countries, to the extent that I've traveled through them ( and I've
been seemingly everywhere ) that's the way they are. They're the rich and
the poor. And the rich live very, very well  but at some cost, because
they have to have chauffeurs and army vehicles and gates around their schools,
their clubs, their communities, everything. And that's what's happening to
the United States. We are creating an underclass of a majority of our people.
I mentioned that our unskilled labor is over 60 percent. That's creating an
underclass in a constitutional republic, a democracy. And that can't work
for long.

So everybody knows and have felt personally what has been happening to our
country recently. They talk about the 2 million manufacturing jobs that have
been lost in two years. Well, that's 2 million families that just dropped
out of the middle class. And we find that these people who lose these jobs,
under economic theory, what happens under creative destruction that was theorized
by Joseph Schumpeter is that with this "creative destruction," you
constantly see that industry is being destroyed and out of the ashes of them
comes a new industry, that people start applying their resources and their
money and their capital to other pursuits. And it's a constant movement up,
there's progress. And, so the buggy whip manufacturer goes out of business
but the automobile manufacturer goes into business. So you see this constant
creative destruction that goes on.

But what's happening today is not creative ... it's a horrible situation
because industries that we're losing are not buggy whip manufacturers. They're
steel industries, textile industries, electronics industries, auto industries.
The great auto industry is one of the most important industries to our economy
because of all of the suppliers and technologies that go into making a car
 the same way that aircraft is important to us because all of the technologies
and things that go into making a Boeing. But Boeing is one labor-intensive
item. By the time they finish making it, that's all labor. Boeing sees that.
Thirty percent of their assembly is now done in China.

But we see things happening today. Ford Motor Company now outsources $1
billion worth of parts to China. They said in a press release the other day
they hope to bring that up to $10 billion in three years. $10 billion of auto
parts in China that no longer will be made here. So we are in a race to the
bottom. We have to do something about it.

Our textile industry, for the first time in a long, long time, are united.
We were all united between 1985 and 1991, when we all fought for the three
textile bills. And if you recall, they were global quota bills. They were
saying, "we are establishing a quota for imports of textiles and apparel
into our market. That quota, that global quota, can only grow as fast as the
growth of the market." And the executive branch ( the king ) can give
that all to China, if they want to. They can give it to Jamaica, if they want
to. They can give it Mexico. But they've only got so much to give. And we
made a compelling case that that should be the way it is. We shouldn't be
giving away more than we've got to give, which is what they're doing today.
All three of those bills passed. All three of them were vetoed and we couldn't
override the veto. We were only 12 votes short of overriding the veto.

But the textile industry that was not very familiar with Washington said,
"we just wasted X millions of dollars fighting for three textile bills
and we got nothing. We are seen as these protectionists and an industry that
can only say no.' We don't want to be seen that way. We want to be seen
as competitive." They said, "we want to be at the table. We want
to be there with you and talk about these things and the whole industry."
In 1991 through just recently, the industry was very aggressive trying to
be "at the table."

But when you get into bed with the government, you get more than a good
night's sleep. And our industry has found that out, because while we were
at the table, we lost three-quarters of a million jobs.

If you go back and check the data, if you look at what happened during that
period, from 1985 to 1991, you'll see that for the first time in the history
of the textile program, that the growth of imports stopped. It just stayed
level  at a very high level, mind you. At that same time, market capitalization
of our publicly held textile and apparel companies went up. During that same
time, employment stabilized in textiles during that six-year period ... I've
got the numbers, but I didn't want to dazzle or confuse you with numbers.
But basically I think we lost, like, 15,000 jobs during that six-year period.
Apparel lost like 30,000 jobs during that period. But that was during a period
when they had 1 million apparel workers.

So our industry was convinced that it had failed after working very, very
hard in Washington, when in fact, by spending millions of dollars on their
legislative efforts, they got billions of dollars and they just didn't know
it. For them, things were getting better. And then they got at the table and
the hemorrhage continued.

The reason that imports stabilized, by the way, is that that first time
we tried to override the president's veto ( and it takes two-thirds vote in
the House of Representatives ) we lost by 12 votes. And they said, "that's
too close." So they dispatched our top negotiator from the U.S. Trade
Representative's office and said, "you go and get Taiwan and you get
Korea and you get Hong Kong and tell them to meet you in Hawaii and I want
you to renegotiate our bilateral textile agreements with them," even
though those agreements were only one-year old and had a number of years to
run. Our president said, "you go there and renegotiate those agreements."

And Michael Smith, who was the negotiator then, went over the Hawaii and
told the Koreans, told the Taiwanese, told Hong Kong that their bilateral
was going to be renegotiated and they objected. They said, "object if
you want, but the first country that agrees gets the best deal. The second
one that agrees gets the second-best deal, third one ..." so on and so
forth. Take your time, make your decision. Boom! We limited them to 1 percent
growth and that stabilized the import growth. Once you stabilize the import
growth, what happens is, it stops ... we couldn't get political critical mass
to override the veto because imports stabilized. And they knew that that would
be the effect.

We lost some of our passion. We lost some of our energy. And so, it was
very, very effective and they did it.

That gets back to the issue now of the squeaky wheel. We were as an industry
very, very squeaky back then. We got them to limit imports for that short
period of time. Today, after losing 750,000 jobs, some of the leaders in our
industry got together and they were in Washington yesterday ... every major
textile association in this country has now agreed to three things:

1) we want the negotiated safeguard with China to be invoked;

2) we want no so-called TPLs in future agreements; and

3) we wan something done about the Chinese currency that's pegged to the
dollar.

Back in 1997 when I was in Peking, we negotiated a U.S.-China textile bilateral.
In that agreement ( and not known to us ) was a safeguard provision that didn't
surface for years. But it basically told China that if you join the WTO during
the life of this agreement, you will join in lockstep with the other countries
in the WTO. In other words, if you were a WTO charter member in 1994 ( like
India was, like Japan was, like we were ) you had to agree to get rid of the
quota system then called the MFA, the Multi-Fiber Arrangement. You had
to get rid of this over a 10-year period all of the quotas that you have.

Our government said, "OK, we'll do that." And we kind of back-loaded
the pain. Most of the pain is going to occur on Day 1, 2005, when 52 percent
of our outstanding quotas will be eliminated.

Between 1994 and 2005, there have been three traunches of liberalization,
a lot of products that were of no consequence to most of us ( cordage, things
like that ) but in the last traunch, Jan. 2001, the third traunch, there got
to be a lot of things that a lot of us make. And we found out that of the
product categories that have now gone quota-free, China sends us 70 percent
of everything we import in a category that's now quota-free.

When I was in Ambassador Zoellick's office with the National Textile Association
board members and officers, I asked Ambassador Zoellick what did he think
was going to happen on Day 1, 2005 when the quota system came off. And he
said, "well, you know, we have a market that consumer ... that's not
unlike the Australian consumer, not unlike the Japanese consumer ..."
And neither Japan or Australia has any quotas at all on China today and China
has 75 percent of those markets. He said, "we're having the International
Trade Commission study this, but I expect the same thing to happen here."
If that happens here, then we'll probably, according to an ATMI study, lose
over 600,000 people.

And at the same time, our government at least believes themselves that China
is going to take 75 percent of our textile and apparel market and that's just
going to happen. But while they believe that themselves, what are they doing?
Couple of years ago they went to Africa and told 44 African nations, "you've
got to get into the textile and apparel business. That will give you the experience
to give you an industrial take-off so maybe you can be just like us."
We're offering them our market. We gave them a preference to our market. We
did the same thing to the Caribbean Basin. We said, "we will give you
a preference into our market so you can sell apparel so that your people will
be better off." They're saying the same thing to Central America, South
America and so on.

In other words, Ambassador Zoellick is going around the world selling the
same dead mule to one country and region after another when he knows there
won't be a market for them. ...

I was so shocked by how disingenuous our government was being, because I'm
one of those people who believes when our country goes and says something,
we should believe it and it should be the truth. If we tell Africa we're here
to help them because they should get into the textile and apparel business,
that should be the truth. We shouldn't in the back of our minds know that
they only have until Day 1, 2005, when that will be all China's.

I was so happy that Roger Milliken and his company were given 150 years
to be in the industry before they started telling us we have to get out and
do something else. They've given Africa only three years.

It's now coming back to haunt them. I've said it many, many times: There's
nothing made in America that can't be made cheaper somewhere else. And that
surely should not mean that we should not make anything here anymore. We have
people who believe ( and Ambassador Zoellick is one of them ) that the trade
deficit is not a bad thing. And I told you our trade deficit is running $1
million a minute, our manufacturing trade deficit over $400 million a year
... because countries that are prosperous run big deficits ... and they can.

I had a guy from the Cato Institute, a Libertarian think-tank, tell me the
other day, he said, "nations are like families. A family runs a trade
deficit with their grocer. A family runs a trade deficit with their oil company.
That's not bad. I mean, we might run a trade deficit with China but that's
not bad because we get the surplus capital that we save by buying cheaper
goods, that we can use for other purposes." So he's drawing this analogy
with family. But show me a family that's running a half a million deficit
with their banker. That's what we're doing.

Now, that money comes back here. And during the 1990s, it came back here
in the form of investments in our stock market, because a dollar is a very
important thing. It's a convertible currency. It's a hard currency. Most countries,
their currency isn't good for anything but landfills outside their own borders.
So everybody wants to have hard currency. If they want to buy a turbine from
Germany, they can't do it with renminbi. They've got to do it with euros or
a yen or a dollar.

So, you see, throughout the world there's this thirst for dollars. Some
Third World countries have a thirst for dollars because they owe money to
banks. Those banks loan you money in dollars, you've got to pay it back with
dollars. Whereas in the early 1970s, when the banks and financial institutions
were facilitating international trade and growth in international commerce
by providing the financing to do it ... that was a wonderful experience. The
synergies, the dynamics were great. But what happened was they made so many
ill-advised loans to Third World countries that had no way of paying it back
unless they sold us something. They had to get a dollar. So what the banking
industry did was urge us to start lowering our tariffs so that these debtors
could sell into our market and take that to banks. So instead of facilitating
international commerce, the banking industry became the tail that was wagging
the dog. They were driving the process. And that's the problem.

Now, financial services, there's been this unending fight to see who gets
the value added when something is made. Is it the producer or is it the investor?
And unfortunately, it's been kind of pegged over on the investor/financial
services side for some time and it hasn't gone back to the worker and the
company he works for.

Corporations can only do what they can do. If I make a widget and you make
a widget and we're equal on everything that we do ( on quality, time of delivery,
price, etc. ) and you go to Mexico and I don't, you win. But the rules say,
because of NAFTA, there will be no tariff barrier between Mexico and the United
States. There's no difference between making it in California and making it
in Mexico, as far as ease into our market. And that's the effect of that agreement.

But at the end of the day, we lose. We lose because, when General Motors
became the largest domestic employer in America before NAFTA and now is the
largest domestic employer in Mexico  Delphi and General Motors . They
would not be the largest domestic employer in Mexico if they couldn't get
their stuff back in here.

So when you look at globalization, you have to look at it in a way that
it's not just happening to you, it's being done to you. As I mentioned earlier,
there's only one group in this whole country that can lower our tariffs and
that's the Congress. And Congress has done so. In fact, they passed in the
House the Chilean and Singapore agreements ... and they've got that momentum.
There's never been an agreement negotiated under fast track that's ever been
defeated. That's by the electorate. Now, that is changing. So there economic
theory and what their end game is not matching our real-live experiences,
because we know we're losing our companies. We know we're losing our manufacturing
employment. And we know that we're not getting newer and better jobs for our
people.

So we're going to have to do something else. So when you see that all of
sudden, the U.S. textile industry is putting pressure on the administration
on China, it is a huge deal. And we should all support the leaders over in
Washington yesterday who made that announcement. And we should, every chance
we get, let our government and our representatives know that we're drawing
the line on China.

ATMI has reinvented itself in many, many ways in the last six or 12 months.
They're a terrific organization. They're doing really good things now. They're
doing hard-hitting studies. They're asking the hard questions and they're
being very, very aggressive. (Chairman) Billy Moore (of Unifi) is one of the
people responsible for that.

I'm going to end here because I've said what I was going to say, but I probably
didn't say what you wanted me to say.

NCMA has turned
corner, chairman says

September 29, 2003

Cowan

Editor's note: Following is a Q&A with James R. Cowan,
chairman of the North Carolina Manufacturers Association (NCMA) and chairman
of Stonecutter Mills Corp., Spindale, NC. Cowan and his group meet in Charlotte,
NC, at the Ballentyne Resort this week. Cowan's responses come in questions
posed to him in written form by Devin Steele, STN editor.

STN: What a year to be a leader in the manufacturing sector, especially
in North Carolina. Given the circumstances of continued job losses in manufacturing,
how would you generally describe the past year?

Cowan: NCMA has been in a transition for the last few years. This
past year we believe that we have turned the corner and are on a growth path
again.

Let me reflect on manufacturing in North Carolina a moment. We pay too much
attention to the obituary column and not enough to what is positive. Manufacturing
is still a vital part of our state's economy. We have lost manufacturing jobs,
but we still have a much higher percentage of our work force in good-paying
manufacturing jobs than most states.

Yes, we are in transition. Yes, we must change, be creative and take risks;
but we have a strong base to build on. Maybe we're a little like Michael Jordan;
we are older, slower and cannot jump as high as before, but not many states
can play one-on-one with us.

STN: Reflecting NCMA's move from a textile organization to a manufacturing
group, you made this statement about recent NCMA chairmen when introduced
as the group's chair last year: "I watched Jim Chesnutt raise the baby,
change the diapers, do all the paperwork and organize this new association.
I watched James Harry hold it steady in its formative years and stabilize
it. And then I watched Milt Gold come up and handle the teenage years, the
tough years, when decisions had to be made and when there were some challenges
to our organization." How would you characterize your term as the caretaker
of this job?

Cowan: Jim Bell has done all the heavy lifting this year in the NCMA,
and he has done it well. He has made our positions clear in Raleigh and promoted
our organization. Honestly, it has been an easy year for me; the others on
our board have done all the work.

STN: This is the second go-round for you with this group, having served
as president when the association was a textiles-exclusive organization. What
was different from a leadership perspective this time?

Cowan: The last time I was president of the association, Jim Chesnutt
was our first vice president and we sat down together and decided that we
needed to make the change from a textile organization to a manufacturing association.
That was a big change organizationally and culturally and it wasn't an easy
decision for the organization to make.

This year we know what we are about, where we're headed and how we're going
to get there. Having the plan in place makes life easier for everyone.

STN: North Carolina continued to take the brunt of the decline in
manufacturing jobs, whose numbers have fallen nationally for 37 straight months.
The state's three-legged economic manufacturing stool - textiles, furniture
and tobacco - endured even more job losses and plant closings in 2002-03,
and other production sectors also fell. The Pillowtex shutdown was the biggest
headline-maker of the year, and R.J. Reynolds this month said it was slashing
40 percent of its work force, but those bad-news items were really only the
tip of the iceberg. How is NCMA working to help displaced members and improving
the economic landscape for manufacturing?

Cowan: Yes, we have taken some major hits this year, but a lot of
us are still here and working for the future. NCMA is telling our story in
Raleigh and our board members are working in Washington. There is a rapidly
growing understanding in the press that this is not a textile problem; it
is a manufacturing problem, and that government bears much of the blame for
our difficulties.

Specifically, NCMA has been directly involved in lobbying at the state level
to ensure that the North Carolina unemployment insurance fund remains intact,
but not at the expense of manufacturers who have been forced to downsize.
Also at the state level, NCMA has historically, through its committee system,
reviewed tax issues, environmental issues and workplace issues to make sure
that laws and policies in each of those areas is favorable to North Carolina
manufacturers as well as to ensure that state policy enhances and promotes
the creation and expansion of manufacturing operations.

For example, during the 2003 General Assembly Session, NCMA garnered the
support of 28 House members to introduce legislation which would exempt manufacturing
income from the state corporate income tax. NCMA also succeeded in having
legislation passed which will make air permitting easier for manufacturing
operations in North Carolina.

STN: In a recent survey by The Charlotte Observer and WCNC-TV in Charlotte,
40 percent of North and South Carolina residents said they believe a family
member will be laid off due to cheap foreign labor. What is NCMA doing to
try to allay these fears?

Cowan: I am not sure that our job is to give false hope. If trade
policies do not change, then our citizens in the Carolinas have a better understanding
of the situation than our Congressmen do. NCMA is spreading the word on how
to be more politically active and prevent this job drain.

STN: How has manufacturing contraction affected NCMA's membership
numbers? How do those figures compare to last year's at this time?

Cowan: Obviously, with the Pillowtex closure and other bankruptcies,
our numbers have been affected, but because we have managed to add new corporate
members even during this dire economic period, we have only two fewer corporate
members than last year and we have added 10 new associate members.

STN: Since the association opened its ranks to non-textile firms,
what is the breakdown percentage-wise of various sectors of manufacturing
within your ranks?

Cowan: Currently, one-third of our non-textile manufacturers are members
of our Boat Builders Division. Overall, 44 percent of our members are non-textile
manufacturers.

STN: How was the organization "sold" to potential members
during the past years?

Cowan: NCMA makes the following points in talks with prospective members:

NCMA provides enhanced political strength through numbers, coalitions and
a united voice. Group action adds strength and prevents any single company
from coming under government scrutiny.

We're your eyes and ears in the General Assembly and in state government.
Our Raleigh-based staff provides an "alert" system to identify legislative
and regulatory issues directly affecting manufacturers.

NCMA members have access to educational meetings, NCMA committees and state-level
meetings and conferences. These provide technical and cost-savings advice,
as well as open doors to state officials and regulators.

NCMA coordinates media advocacy and relations for North Carolina's manufacturers.
One central source for media communications ensures that the correct facts
are conveyed and gives manufacturing's side of issues.

STN: How have the state's financial troubles affected the association's
goals?

Cowan: Ironically, the state's financial troubles have made NCMA's
work all the more important to our manufacturers because many state policy
makers are looking for additional tax revenue, which could be very harmful
to NCMA's members. For example, the caps on the boat sales tax and manufacturing
machinery have been targets during the last two General Assembly sessions.
NCMA has addressed these issues with our political leaders on behalf of our
member and will continue to do so.

STN: What are some of the legislative/regulatory issues or concerns
NCMA dealt with this year?

Related to environmental legislation and policy, following a two-year lobbying
effort, legislation was enacted to make the air permitting process easier
for manufacturers; the rule-making process was improved to ensure that state
agencies don't circumvent previous NCMA-backed legislation by adopting "temporary"
or "emergency" rules; NCMA continues to lobby for passage of legislation
that will keep state rules from being more stringent than corresponding federal
rules; and finally, increased environmental penalties were held in check except
for the most egregious and intentional offenses.

On workplace legislation, NCMA worked against various trial lawyer proposals
to unduly expand the Workers Compensation system and defeated duplicative
"little EEOC" bills and unreasonable amendments to North Carolina's
OSHA law. NCMA also fought off all attempts to mandate additional health benefits
in company health care policies.

STN: What are the bright spots in manufacturing in North Carolina?

Cowan: North Carolina's boat-building sector, which includes a good
number of NCMA's Boat Builders Division members, is the only one of the "heritage"
industries (tobacco, textiles, furniture and marine) that has not been negatively
affected by economic conditions and trade policies in the past 10 years. Our
boat builders are an important part of the North Carolina economy, flourishing
and gaining momentum over the past three decades.

In addition, medical and industrial applications of textile products, nonwovens
and biotechnology continue to perform well for North Carolina. Finally, those
companies using technology and a well-trained work force to set their products
apart from foreign imports will continue to succeed.

According to Roland Stephen, a political economist at the Institute for
Emerging Issues at N.C. State University who was quoted in a recent Raleigh
News & Observer article, "If you're just competing on cost only,
it's going to be impossibly hard to compete against rivals in China or other
places where cost is the most important consideration. What you need to do
is compete based on innovative products aimed at new markets. It's harder,
it's high-risk, but in the long run, it presents more opportunities."

NCMA's members have proved themselves to be innovative and resilient over
the years in adapting to different economic situations, including the recent
woes caused by the United States' unfair trade policies. I have no doubt North
Carolina's manufacturers will rise to the occasion again.

STN: What "exciting" is going on within the organization?

Cowan: NCMA continues to provide educational opportunities for its
members through its committees and various one-day seminars held throughout
the year. Also, the plight of North Carolina's manufacturers finally seems
to be getting the attention of both political leaders and the general public
in the wake of recent publicity about the demise of Pillowtex, Cone Mills
and other manufacturers.

NCMA has seen the positive impact this attention has had on our legislators
in our everyday lobbying efforts. In addition, NCMA's 2003 Annual Meeting
provides an excellent opportunity to discuss manufacturing issues; share information
and meet with political leaders.

NCMA's Executive Committee has also formed a long-range planning committee.
Among their tasks is to look at partnerships with other trade groups in North
Carolina, including the many regional groups throughout the state. They will
also evaluate how the "leaner, meaner" NCMA is working, and make
suggestions on improving member services and cost efficiency.

STN: NCMA was part of the coalition of textile/fiber/manufacturing
groups to come together this summer with the mission of trying to effect change
in Washington related to trade policies, particularly as they relate to China.
Why is your involvement important to your membership? Do you think the alliance
has made strides?

Cowan: Our involvement in the coalition is important because it must
be remembered that vital trade legislation, such as TPA ("fast track")
was enacted by a single vote. Thus, we cannot take our North Carolina delegation
for granted and we must continue to put pressure on them to work for trade
legislation that will benefit our membership.

This alliance, for the first time in memory, has brought together all of
the diverse segments of the textile/fiber/labor/agriculture communities with
a single goal in mind. The recent involvement of Wilbur Ross in the North
Carolina textile industry through his purchase of Burlington Industries adds
yet one more strong set of allies to the political war that will ultimately
decide whether the U.S. government will pursue an industrial trade policy
beneficial to its citizens.

STN: Why is serving in a leadership role such as this important to
you?

Cowan: The NCMA is my business community and just as we all serve
our local communities in some way, it was my privilege to be able to contribute
a little of my time to the group effort. When (my wife) Myra and I look at
the past leaders of this organization, it is very special to be allowed to
add our efforts to theirs.

STN: Please describe the working relationship you have with your officers
and board, the NCMA staff and your expected successor, Tom McCall of WestPoint
Stevens.

Cowan: We are extremely fortunate to have a group of officers and
board members who are more than willing to give of their time and effort to
advance the cause of manufacturing in North Carolina. Our officers and Executive
Committee members meet in Raleigh with the NCMA staff several times a year
to review programs and policies.

I find it encouraging that while many of these executives such as Tom McCall
have been going through difficult times in their own businesses, they still
find time to advance the mission of the association.

The veteran NCMA staff has been available throughout the year and continues
to be responsive to our concerns and ideas. I feel completely confident in
Tom McCall's ability to lead NCMA through the next chapter of its long history.

STN: How has NCMA helped you grow professionally?

Cowan: I get an opportunity to be around some people in this industry
that I admire greatly. Buster Humphries, George Waldrep, Jim Chesnutt and
others taught our Stonecutter group a lot of things over the years. They helped
us reach our potential and weather the tough times. The NCMA is a wonderful
place to meet new people and learn new things. Anyone who has an opportunity
to be involved should jump at the chance.

STN: What do you hope members will take away from this year's annual
meeting?

Cowan: Two things. First, that although we may be a little beat up,
we are not dead. We are strong and even stronger united. We must voice our
opinions to Congress; we cannot wait for someone else to do it for us; we
must be agitators. It's not our traditional role, but these are not normal
times.

Second, we must promote the value of education in our local communities.
New ideas will come from fertile minds that will create new businesses and
new jobs. We must accelerate our people's creativity by pushing the value
of education every chance we get.

I also hope our members will use this meeting to talk with the various political
leaders who will be here, including the Co-Speakers of the N.C. House of Representatives;
Commissioner of Labor Cherie Berry; U.S. Representative Sue Myrick; the U.S.
Commerce Department Chairman of the inter-governmental Committee for the Implementation
of Textile Agreements (CITA); and the North Carolina Commerce Department official
in charge of assisting manufacturers currently operating in our state.

Editorial

September 29, 2003

Fall in, Mr. October

AH, OCTOBER.

We humbly await your arrival this week. We know you will breeze in like
a sylph, shake us from our lingering summertime stupor and leave us only with
a yardful of leaves to rake. As always. But not before sending a shiver up
our spines with a "BOO!" or two on your last day of breath this
year. Already, we have sensed your footsteps. Pumpkins are appearing. Sunshine
is becoming scarcer. Football is kicking into high gear. Crisp air is nipping
at our noses. Be sure to wipe your feet before entering, Octo (can we call
you Octo?) and please be sure not to wear out your welcome, you 31-day "behe-month."

For many of us in the textile and affiliate industries, you represent another
season of change (as if we haven't been through enough changes already in
recent years). In fact, we've probably been asked (no, forced) to change more
than any other business entity in this country lately. The powers that be
have determined that textile products will be among the most globally produced,
and it seems they've all been headed our way of late. Many of these imports
have been produced with the aid of government subsidies and under much different
circumstances, have eased into our market through foreign-friendly U.S. trade
laws and have illegally entered our borders through intentionally illicit
tactics. We've been pressured to compete on a worldwide scale, which in some
respects has been a positive (provided that scale is a little more balanced
than it has been recently).

NOT THAT change is a bad thing, Mr. October. We welcome change (thrive
on it, actually). We've tried to change with the times, though the pace of
change has been mind-numbing over the past decade or so. As global trade talks
have increased and the world has shrunk, we have adapted. Ours is one of the
most high-tech, sophisticated, efficient industries in the world, thanks in
part to good ol' American leadership, entrepreneurism and ingenuity. And,
for more than two centuries, it has been one of the most competitive.

But the tide has turned, through no fault of our own. The odds have been
stacked against us, with politics ruling our fate more than anything. Our
own government, hands firmly in the coffers of retailers, importers and the
like, has made us the whipping boy in trade matters for oh-so many years.
Now, the rest of U.S. manufacturing is beginning to be singled out, too.

Yet, we're still kicking.

WHEN YOU GET here wearing your orange and black robe, Tenth Month,
don't expect to see this industry sitting around wearing its black and blue
funeral clothes, though. Yeah, we're beat up and battered, but we ain't whipped.
We've ditched the temptation to adopt a woe-is-me attitude, and we've put
up our dukes. You'll notice that we'll be as active as before (but probably
angrier than ever). Your appearance will signal a busy week for us, with trade
shows scheduled for Las Vegas (IFAI Expo) and Miami (Material World) and a
textile-rooted group (the North Carolina Manufacturing Association) gathering
in Charlotte. Before you depart, we'll congregate in England for the world's
largest textile trade show in our quest for staying among the most technologically
advanced industry around.

Oh, and you'll probably notice that since your last appearance, we've mended
a lot of fences in our industry and are actually speaking to one another again.
We've united (finally) and are trying to save ourselves from our government
and the rest of the world. There aren't as many of us this year, as closings,
consolidations and continued layoffs have taken an even bigger toll on our
ranks. You no doubt will even witness our ire, which no longer bubbles under
the surface and could actually cause your cauldron to runneth over.

When you leave, we'll be one month closer to 2005, when worldwide quotas
on textile goods are dropped among WTO trading partners. So, you can understand
what you represent to us (the passage of time and an ominous sign that things
will change for us). Again.